Broader market sentiments remain muted with value fashion segment continuing to fare better than the urban segment. In view of this, retailers are resorting to cost control measures to protect their profit margins.

• ICRA expects a demand recovery in the Indian fashion retail industry from H2 FY2026 onwards led by the festive season and benefits of GST rationalisation. ICRA forecasts retail entities in its sample set to report 13-14% revenue growth in FY2026, led by network expansion and improvement in demand conditions.
• ICRA’s sample set of retail companies saw revenue growth of 15.6% in FY2025, led by an increase in stores network and expansion in non-apparel product categories. While same store sales growth (SSSG) improved for value retail owing to improved demand, it remained flat for the lifestyle segment. In Q1 FY2026, revenues grew by 12% YoY supported by higher number of wedding dates.